Alcohol manufacturers and dealers have faulted Treasury proposal to raise excise duty on beer yearly for inflation, warning of a possible spike in the flow of illicit low-cost brew.

The Alcoholic Beverages Association of Kenya (ABAK) reckons the annual tax increments would push the majority low-end consumers to low priced, unregulated liquor and hurt dealers along with the taxman in foregone revenues. It would also undermine government’s ongoing efforts to fight counterfeits, they say.

The Finance Bill 2018, whose passage will bring into force a raft of budgetary tax changes, proposes the annual raise of the sin tax on beer, cigarettes and petroleum products.

“Due to its elasticity, consumers always respond to alcohol price changes. This causes a spiral effect on production and supply chain, on jobs, government revenue and the overall performance of the economy,” the association said in a note.

“The local production decline will in turn result to job losses and ... Read More

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